Leading merger in a Stackelberg oligopoly: Profitability and consumer welfare

Chih-Chen Liu and Leonard F.S. Wang

Economics Letters, 2015, vol. 129, issue C, 1-3

Abstract: This paper examines the effects of obtaining a strategic advantage of becoming the leader in the market on insiders’ incentives to merge and consumer welfare. We show that being the market leader is privately profitable for the merging insiders. We also show that the leading merger would benefit consumers if and only if the number of insiders is sufficiently small.

Keywords: Horizontal merger; Stackelberg competition; Consumer welfare (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 L40 L41 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:129:y:2015:i:c:p:1-3

DOI: 10.1016/j.econlet.2015.01.032

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